The value of corporate creativity and innovation in entrepreneurial growth

Innovativeness and Creativity are very important skills for business enterprises, and to succeed in the increasingly competitive business environment in Kenya, firms need to be very innovative and creative. Schumpeter (in Tidd et al., 2006) defines innovations as product, process and organisational changes that do not necessarily originate from new scientific discoveries, but may arise from a combination of already existing technologies and their application in a new context (Žižlavský, 2011).

Innovation therefore is the process through which the entrepreneur converts market opportunities into workable, profitable, and marketable ideas. Innovation is a critical factor for firms to create value and sustain competitive advantage in today’s highly complex and dynamic business environment (Ranjit, 2004)

Creativity is marked by the ability to create, bring into existence, to invent into a new form, to produce through imaginative skill, to make to bring into existence something new.(Harris, 1998).

Studies have shown that innovation and creativity have positive impact on the four dimensions of competitive advantage namely; cost, quality, time and flexibility ( Clark et al.,1988).According to Tidd et al., (2006) innovation contributes to achieving a competitive advantage in several aspects, including: strong relationship between market performance and new products, new products help maintain market shares and improve profitability and Development in comparison to competitors.

In a competitive business environment, the entrepreneur and the enterprise should continue to seek out now opportunities and make the necessary arrangement to convert them into new goods and services. Innovation should, therefore, impregnate the entire enterprise for the creation and invention of competitive edge and relevancy in the market place.

Innovation can take several forms:

1. Innovation in processes, including changes and improvement to Methods. These contribute to increases in productivity. Which lowers cost and helps to increase demand.
2. Innovation in products or services. While progressive Innovation is predominant, radical innovation opens up new markets. These lead to increases in effective demand which encourages increases in investment and employment.

    3. Innovation in management and work organization, and the exploitation of human resources, together with the capacity to anticipate techniques.

How companies in Kenya have used Innovation and Creativity to remain competitive

 Nation Media Group

Media industry in Kenya has encountered several challenges in the recent past in coping with the ever changing environment. This is especially so because with the advent of technological changes and the development of complex and faster platforms of conveying news. The proliferation of social media and internet, which transmits news real time as well as need to go digital has greatly affected print and electronic media.

Nation Media Group has managed to weather most of these challenges through introduction of new products and different lines of income and at the same time improve on current processes through innovation. (Muthuki 2013)

East Africa’s largest media group is subtly transforming itself into an internet and financial services powerhouse. Between 2009 to 2015, the Nation Media group has launched N-Soko, a classifieds site which competes with Craigslist in Kenya, Twende Twende– Kenya’s first online travel site and Nation Hela, an international money transfer service which allows Kenyans in the Diaspora remit money to their families at home online.

The group’s flagship publication, Daily Nation is the highest-circulating newspaper in the East and Central African region. Daily circulation: 210,000. Its Business Daily newspaper is East Africa’s most popular business journal and its Television and radio stations consistently rank among the most popular among African viewers and listeners.

Co-operative Bank of Kenya Alternative Banking channels drive

Kenyan Banks have been seeking to transit from the traditional teller method as they look to lock in customers who are increasingly unwilling to travel and queue for long in banking halls, as well as take advantage of the cost savings of using agents and mobile banking. Agency Banking has experienced tremendous growth in Kenya, with the volumes transacted by bank agents in the three months to the end of September 2015 rising by Sh70 billion to hit the Sh1 trillion

Although Standard Chartered Bank pioneered the unmanned branch in 2013, fitted with iPads, personal computers, touch screens mounted on walls, and free Internet, they never targeted the mass market.

In an effort to improve its performance as the third biggest bank in Kenya by assets, through leveraging on non-funded income streams,Co-operative Bank became the first lender to station agents inside branches in a bid to help remove customers from its banking halls and lure them to use alternative banking channels.

The agents in the process cross sell agency banking and other out-of-branch products such as mobile money.

This creativity and Innovation in processes, products or services has resulted into Migration of over 70 per cent of previous branch transactions to alternative channels, improving convenience for customers while reducing bank operation costs; Staff costs dropped by 7.2 per cent by September 2015.

Safaricom Kenya Limited

East Africa’s largest mobile telecommunications provider easily ranks as the most innovative company in sub-Saharan Africa. (www.forbes.com)

Safaricom Management believes in investing in the future. Working hard towards the creation of technologies that positively impact the society and most importantly transform the lives of those around us is a core value that we hold dear. Continuous creativity and innovations in the mobile money sector have put Safaricom on the global map. (www.safaricom.co.ke/about-us/innovation)

M-Pesa, (M for mobile and Pesa- a Swahili word for money) is Africa’s first Short Message Service-based money transfer service launched in 2007, it allows users to deposit, transfer and withdraw funds via text messaging Service through registered M-Pesa agents for a fee of a little over $1.

Safaricom also pioneered Kopa Credo, which offers subscribers airtime on credit, introduced the payment of utility bills through the M-Pesa platform, Sambaza which allow subscribers to transfer airtime value to other subscribers.

The Safaricom Academy offering a two year Master’s degree course in Mobile Telecommunications and Innovation was set up in 2010 through collaboration between Safaricom and Strathmore University.

The Safaricom Appstore allowing customers to download both locally developed and globally recognized applications such as Facebook on devices regardless the mobile platform. The continuous creativity and innovations in processes, products and services has provided Safaricom with distinguished business competitive advantage in the telecommunication industry in Kenya.

CONCLUSION

From the case examples discussed above, it’s evident that continual competitiveness cannot be sustained without continuous innovations and creativity of products and services. To remain competitive, enterprises need to constantly improve their existing products and services through continuously innovating needed changes: and for survival of the enterprise, must also need to create new products and services to meet yet unfulfilled needs. Enterprises that rely exclusively on innovation will prosper until their products and services reach the non-competitive stage of the Decline phase during which sales begin to decline and Market share begin to shrink. On the other hand, enterprises that are innovative and creative will have their new products and services always ready to launch. If an organisation is not capable of introducing innovations on an ongoing basis, it risks that it will lag behind and the initiative will be taken over by competitors. Creativity and innovation are therefore strategic priority for organizations, in today’s business environment where competition requires business enterprises to be distinct and meet customer needs.

The increasingly competitive business environment in Kenya, therefore demands renewed dynamism of approach. Creativity and innovation is the new name of the game. Only the discerning organizations can manage the changes inherent in the new environment. It is the duty of the firms to keep organizations lean, young, flexible, and eager for new things to continuously delight the customers, while benefiting from the resulting competitive advantage.